April 7, 2018: Trump Tries to Fire up His Base with a Trade War

Trump prepares for battle (Zero Hedge)

On Tuesday, Democrats in Wisconsin won a statewide election for a Supreme Court seat by more than 11 points.  Wisconsin went for Trump in 2016.  The Republican tax cuts, which primarily benefit the wealthy and large corporations, also are not impressing voters.   We learned in addition that Special Counsel Mueller plans to release a report in June or July about obstruction of justice by the Trump administration, with the investigation into collusion with the Russians in the 2016 election continuing after that.

Beset on several fronts, Trump did what he often does and decided to fire up his base, with the added benefit of distracting from his problems.  He jumped on immigration and ramped up tariffs on Chinese imports.   Trump ordered the military send troops to border with Mexico, as if some military threat exists.   More dangerously, Trump threatened on Thursday to add another $100 billion in tariffs to Chinese products in addition to the $50 billion he advocated previously.  On Friday, the Dow Jones dropped two percent.  That led to howls from Wall Street and Republicans who are seeking reelection in the fall. 

Trump, though, does not care about the market or Republicans, at least in the short term.  Trump is out only for himself and is always willing to sacrifice others if it is expedient for him.  While many Americans have investments in the stock market, Trump’s base of white, working-class voters likely has little to lose in terms of stock values.  More troubling, Trump’s grasp of economics is so thin that he has long argued that tariffs would actually benefit the American economy. 

Ironically, if an actual trade war occurs, the increased prices in consumer products and loss of U.S. manufacturing jobs will be deadly for Trump and Republicans in the upcoming elections.  Perhaps Trump’s advisors will convince him to avoid an actual trade war with minor concessions from China and advertise them as massive victories.  That is certainly an approach Trump has taken before.  But even if Trump chooses to do that, his execution is so haphazard that he may bumble his way into an actual trade war, with devastating results for all Americans. 

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